Nine out of ten US CEOs say they are strengthening their customer and client engagement programs. 63% have listed these customer programs as one of their top 3 investment priorities. I spoke with Don Weiss, Director Supply Chain at Harris Corporation, to understand how Harris is investing their client relationships. What I discovered is often these investments begin at the core of a company's infrastructure.
What are some key success factors effecting the retaining and enhancing of existing customer relationships?
Our organization is all about program excellence and meeting customer commitments. So it's all about meeting the cost, the target, and the quality expectations of those projects. So we have very specific requirements and all the contracts that we have whether it's a development contract, which tends to be around state-of-the-art technology, needed quickly. So cost and schedule is very important. And whether it's a production job where they just want to get 10 boxes per month on time. So we pay a lot of attention to execution. So the supply chain portion of that, our suppliers? on-time delivery, our suppliers? high quality, our ability to feed a factory or a feed a program with the required components is very important.
I would say the biggest challenge frankly is on development jobs where the design is maturing later than planned. So it's a little slower coming out of the engineering organization and we get into time constraints relative to being able to place orders. We oftentimes will get into long lead items that maybe weren't anticipated when the design was conceived but yet come up as a part of bill of material that have to buy something and you have a 20-week lead time and they really need something in 10 weeks, so all of the alternatives around that.
So I would say, the development programs clearly are the much more challenging programs; our production programs generally go pretty well, because we've got a contract, we have a cycle to plan, and then we?re pretty good about meeting those commitments and the requirements of firms. So, we do very good on production jobs, it's the development jobs that provide some challenges, a lot of challenges. Roughly 75% of our work is new development work and 25% are production jobs.
Is there any unique process you've developed to address this challenge and follow through on customer expectations?
There are a couple of things. One is part of the functionality that we integrated into our ERP application, an internal portal with our suppliers. We call it EXPO. But part of that portal has an application that is very much integrated with our suppliers around the RFQ cycle as well as the purchase order replacement cycle. This gives suppliers the ability to do self-service on their performance characteristics like quality, schedule, and payments. This was a key development that we started about 10 years ago and we've continued to refine it.
Our current refinement that we have underway will enable design engineers to basically go into this application and, from a list of about six to seven distributors, do their own quote purchasing work. Think of it as a shopping cart, full of parts that will be reflective of stock available in these distributors. It will import that data into our PDF system which will create records within our ERP system. This will transmit purchase orders to those distributors. It will also enable those parts to be received without the intervention of a buyer yet keep all of the cost associated with that material, associated on the right contract, with parameters set up around it.
It's intended to enable those quick responses without even having my buyers have to do any kind of purchase order transactions on a handful of standard OEMs. So the thinking is that the engineers can do their own self-service based on what's available in the inventory and all of the back office data elements will become automated. I'll manage the distributor for what he shipped but not every line item like I am probably doing today.
Today I have automated those line items but this will actually enable me to back-off having a buyer slow the process down by a traditional requisition quote, PO placement and those activities.
And is this a competitive advantage for you?
I believe it is, it's clearly intended to save cost by my supply chain team not having to touch it and also from an engineer's perspective that's going to save them cycle time. And oftentimes, a lot of things they're designing, they're only designing of one source of prototype phase, so getting the parts in, building something and finding out that it works or doesn't work, is more valuable, is very valuable. So again time to market, it should help.
Harris continues to invest in the customer. How are you adjusting your internal infrastructure to enhance existing customer relationships?